Barr Worries Fed Supervision Retreat May Allow Risk to Build (1)

Federal Reserve Governor Michael Barr warned that weakening the agency’s supervision may lead to “real dangers” accumulating in the banking system, which over time might sow the seeds of a crisis.

Supervision relies on a credible ratings framework, forward-looking supervision and strong staff, Barr said on Tuesday at the Kogod School of Business at American University in Washington.

He added that he sees private credit as an area of potential risk, noting there are vulnerabilities in the insurance system tied to it.

“There are vulnerabilities that have built up in the insurance system that are related to private credit and ...